Question
a-Ajax Computer Company is an accrual method calendar year taxpayer. Ajax has never advertised in the national media prior to this year. In November of
a-Ajax Computer Company is an accrual method calendar year taxpayer. Ajax has never advertised in the national media prior to this year. In November of this year, however, Ajax paid $3 million for television advertising time during a "super" sporting event scheduled to take place in early February of next year. In addition, in November of this year the company paid $2,500,000 for advertising time during a professional golf tournament which will occur once in April of next year. What amount of these payments, if any, can Ajax deduct this year?
$3.00 million
No deduction can be claimed this year.
$5.50 million
$2,500,000
$5.50 million only if the professional golf tournament is played before April 15.
b- Maren received 12 NQOs (each option gives her the right to purchase 8 shares of stock for $10 per share) at the time she started working when the stock price was $8 per share. When the share price was $17 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $22 per share. How much gain will Maren recognize on the sale and how much tax will she pay assuming her marginal tax rate is 35 percent and long-term capital gains rate is 15 percent??
$0 gain and $0 tax.
$1,152 gain and $173 tax.
$480gain and $168 tax.
$480 gain and $72 tax.
C-
Carolyn has an AGI of $39,800 (all from earned income), two qualifying children, and is filing as a head of household. What amount of earned income credit is she entitled to? (Exhibit 8-10)
$3,305
$980
$4,568
$5,548
$0
D-
Jorge purchased a copyright for use in his business in the current year. The purchase occurred on July 15th and the purchase price was $81,000. If the patent has a remaining life of 75 months, what is the total amortization expense Jorge may deduct during the current year?
$0
$6,480
$5,940
$12,960
None of these:
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